Correlation Between Dine Brands and Playstudios
Can any of the company-specific risk be diversified away by investing in both Dine Brands and Playstudios at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dine Brands and Playstudios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dine Brands Global and Playstudios, you can compare the effects of market volatilities on Dine Brands and Playstudios and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dine Brands with a short position of Playstudios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Playstudios.
Diversification Opportunities for Dine Brands and Playstudios
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dine and Playstudios is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios and Dine Brands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dine Brands Global are associated (or correlated) with Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of Dine Brands i.e., Dine Brands and Playstudios go up and down completely randomly.
Pair Corralation between Dine Brands and Playstudios
Considering the 90-day investment horizon Dine Brands Global is expected to generate 1.06 times more return on investment than Playstudios. However, Dine Brands is 1.06 times more volatile than Playstudios. It trades about 0.02 of its potential returns per unit of risk. Playstudios is currently generating about -0.17 per unit of risk. If you would invest 3,034 in Dine Brands Global on November 4, 2024 and sell it today you would earn a total of 4.00 from holding Dine Brands Global or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dine Brands Global vs. Playstudios
Performance |
| Timeline |
| Dine Brands Global |
| Playstudios |
Dine Brands and Playstudios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Playstudios
The main advantage of trading using opposite Dine Brands and Playstudios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands position performs unexpectedly, Playstudios can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Playstudios will offset losses from the drop in Playstudios' long position.| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
| Playstudios vs. SohuCom | Playstudios vs. Snail, Class A | Playstudios vs. Playtika Holding Corp | Playstudios vs. Golden Matrix Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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